This year, the Board and its standing committees also specifically addressed the procedure regarding the licensing of music for training artificially intelligent music generators as part of their strategy deliberations.
Company strategy
The Executive Committee adapts SUISA’s business strategy to the changes in circumstances every year and submits it to the Board of Directors for approval. Furthermore, the strategy is based on the well-established three-pillar principle: Licensing of the world repertoire in Switzerland and Liechtenstein (1st pillar), licensing of the SUISA repertoire for online use worldwide (2nd pillar) and the generation of secondary income to cover costs (3rd pillar).
The revised strategy places greater emphasis on the goal of strengthening the system of (mandatory) collective rights management. A large proportion of the works exploited can only be captured by means of collective management. However, SUISA is repeatedly confronted with attempts by third parties to circumvent this system. This is why the strategic focus on this topic is becoming increasingly important.
The “AI strategy”
In order for artificially intelligent music generators such as Suno or Udio to function at all, they need training data. Corresponding AI models therefore make use of copyright-protected musical works in order to learn from them. However, at times this training takes place without the rightsholders’ consent and is therefore illegal.
Back in December 2023, the Board addressed issues surrounding the rapidly developing phenomenon of “Generative Artificial Intelligence” (GenAI) and decided to press ahead with the licensing of this new form of music use. Since the advent of this new technology, SUISA and its foreign sister organisations have endeavoured to negotiate compensation for their members. However, the complexity of the situation and the associated legal uncertainty require international coordination and a well thought-through approach. The Board discussed the strategy in detail and refined it further.
New practice for licensing major concerts
SUISA is increasingly confronted with direct licensing efforts by rightsholders when it comes to the exploitation of performing rights for major concerts. If individual players carry out certain licensing activities individually, this has negative consequences for the collective rights management system. This is because the greatest possible and most complete possible bundling of rights is a prerequisite for collective management to be operated economically and with a high standard of quality.
The Board has decided to change the cost deductions for major concerts in order to counteract the increasing number of such direct licences. This measure only applies to concerts that take place in venues with a capacity of at least 5,000 people and where at least 60% of the works performed were created by the performers.
Cost unit accounting
Cost unit accounting is a strategic management tool that indicates what areas in the core process cause what costs. Accordingly, it assigns all costs incurred to a specific “cost unit”, e.g. a tariff, so that it is clear how expensive the processing chain is from invoicing to distribution in the respective area. The objective is to understand what the cost of each service is in order to derive strategic measures. The Board analysed the cost unit accounting presented to it in detail and drew the relevant conclusions for the strategy.
